DRC: The grey areas of the Dan Gertler deal

By Joël Té-Léssia Assoko, Stanis Bujakera Tshiamala
Posted on Monday, 7 March 2022 12:06

The DRC’s justice minister Rose Mutombo and Israeli businessman Dan Gertler at the presidency on 25 February 2022. © DRC Presidency

At President Félix Tshisekedi’s behest, the DRC government has reached a compromise with the controversial Israeli tycoon Dan Gertler. Kinshasa will be getting back various mining and oil assets in exchange for dropping their lawsuits.

The DRC presidency says this is a historic first for the country, which is now reclaiming assets whose sale had been questioned.

“This is a great event for the DRC because we have just signed a contract that puts an end to the disputes between the DRC and the Ventura group [one of the many companies owned by Israeli businessman Dan Gertler]. The President of the Republic had opted for an amicable settlement to this long-running dispute,” says a delighted Rose Mutombo, minister of justice.

This is also good news for Gertler, who traveled to Kinshasa on 25 February to sign the agreement.

“It is thanks to the President of the Republic that this protocol has been signed. It is a great relief […] for the group, for the Republic and for the people,” says the Israeli businessman’s entourage.

The discussions lasted 20 days before an agreement was reached, as requested by the President of the Republic who personally supervised the exchanges.

Kinshasa estimates that the mining and oil assets that will be returned to them are valued at between $2bn and $3bn, depending on the source. No neutral expert has been able to confirm this valuation. The Congolese government believes that the 25 February agreement provides an amicable solution to a dispute that has lasted for several years.

“The discussions lasted 20 days before an agreement was reached, as requested by the President of the Republic who personally supervised the exchanges,” a source who was informed of the details of the negotiation told us. “As far as oil assets alone are concerned, more than $300m will be recovered,” adds our interviewee.

The question of royalties

The DRC is also recovering “a substantial part” of the royalties from the Kamoto Copper Company (KCC).

During the first half of the 2010s, the Congolese national mining company Gécamines transferred royalties from KCC, which was controlled and managed by the Swiss giant Glencore, to one of the companies in Gertler’s complex and fluctuating galaxy. In 2016, the NGO Global Witness estimated that these rights were worth up to $880m.

This amount was contested by Gertler’s entourage, which specified that this amount “includes royalties paid in 2012, 2013, 2014 and 2015.”

US sanctions

In addition to the uncertainties surrounding the valuation and scope of the assets that Gertler transferred, there are doubts regarding the feasibility of these transfers.

The Israeli entrepreneur has been under US sanctions imposed by the Office of Foreign Assets Control (OFAC) since 2017, due to suspicions concerning “opaque and corrupt mining and oil contracts.” Washington accuses him of having caused the country to lose “$1.36bn in tax revenues” during the 2010s.

“The OFAC sanctions are clear: no person, financial institution or other entity wishing to access the US financial system can have relations with Gertler without the US government’s explicit authorisation,” a former US official familiar with the case told us.

As a reminder, Gertler is suspected of having taken advantage of his close relationships with former president Joseph Kabila (in power from 2001 to 2019) and other senior Congolese officials to obtain permission to exploit mining resources in the country, according to investigations carried out by the US, UK and Swiss authorities.

Congo should get its resources back, but it should not have to give Gertler a single cent.

“Our intention was and is to make an example of him,” continued the US leader. “That is why we want to know the terms [of the 25 February agreement]. The Congolese people have a right to know and the US wants to make sure that our sanctions are respected and that Gertler receives nothing.”

According to the Hebrew newspaper Haaretz, the Israeli billionaire has in recent months sent representatives to negotiate and settle the sanctions issue with the US authorities and end an international arbitration procedure against him. Gertler is considering a proposal, in which he would serve a prison sentence in Israel in exchange for closing all his cases.

Unanswered questions

Other questions remain unanswered.

Does the agreement cover all of Gertler’s allegedly “ill-gotten” assets? His entourage certainly thinks so, referring to an arrangement “that covers all of the businessman’s activities.” Although some civil society organisations – such as the Association Congolaise pour l’Accès à la Justice and the Association Africaine pour la Défense des Droits de l’Homme – have welcomed the deal, the NGO Congo n’est pas à Vendre (CNPAV) has not.

The latter is demanding greater transparency and questioning the lack of details regarding royalties from Mutanda Mining (operated by Glencore) and Metalkol (managed by the Kazakh group Eurasian Resources). The NGO is also wondering about where the recovered goods ended up. All these questions “remain unanswered for the moment because the government does not want to be transparent,” says CNPAV. Moreover, “does the out-of-court settlement mean that no legal proceedings are possible in the DRC?”, asks the organisation.

“Congo should get its resources back, but it should not have to give Gertler a single cent,” says US diplomat Peter Pham, former special envoy to the Great Lakes region. “The owner of a house that has been robbed may decide to forgive the person who returns the stolen goods, especially if the criminal is truly sorry for his evil actions. But the victim of a crime should not be required to pay anything to get back what belonged to him or her in the first place,” says the US leader.

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